Industry's Stimulus Package - Cull Sows

It’s tax season – and as predictable as a New Year’s resolution – we vow, again, to keep closer tabs on our dollars.

It's tax season and as predictable as a New Year's resolution we vow, again, to keep closer tabs on our dollars. It's a wise pledge. But in these trying financial times with its daily dose of stimulus packages, bank bail-outs and higher unemployment rates, it's darned easy to feel rubbed raw with pessimism. At every turn, we seem to be compensating for the irresponsible behavior of the guardians of

It's a wise pledge. But in these trying financial times with its daily dose of stimulus packages, bank bail-outs and higher unemployment rates, it's darned easy to feel rubbed raw with pessimism.

At every turn, we seem to be compensating for the irresponsible behavior of the guardians of our wealth. There's the latest $800 billion “stimulus” package, mostly handed out to big financial institutions. And the last week of February, our congressional leaders saw fit to add another $410 billion to the budget they passed last fall. Add up all of the stimulus packages and the budget bumps — it's been calculated that the federal government will spend 24% more this year than last. Meanwhile, we sit on a $1.5 trillion deficit, with promises to cut that in half in four years.

As President Obama so aptly acknowledged in his “day-of-reckoning” address to Congress, “You don't need to hear another list of statistics to know that our economy is in crisis, because you live it every day.”

Amen to that.

It is widely known that Mr. Obama is an admirer of Presidents Lincoln and Roosevelt, but a bit of wisdom shared by Thomas Jefferson in 1802 might serve him better. Jefferson remarked, “Banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.”

Global Economy

On the positive side, University of Missouri agricultural economists recently shared a little good news — pork demand was 2% higher for the November 2008 through January 2009 period, compared to a year ago, and hog demand was 1% higher. Not big numbers, to be sure, but on the right side of zero, nonetheless.

In his address to Congress, President Obama also reached out to foreign buyers and suppliers when he acknowledged: “For we know that America cannot meet the threats of this century alone, but the world cannot meet them without America.” And, he added, “For the world depends on us to have a strong economy, just as our economy depends on the strength of the world's (economy).”

Yes, we are all in this together — red states, blue states, foreign governments of every order. The global scope of the economic crisis is daunting and, although history teaches us that the track record of those pledged to fix it — don't — perhaps the best recourse we have is to individually narrow our focus and make better personal and business decisions.

If we pull back a little from the wobbling monster — the global economy — and zero in on the pork industry, foreign and domestic, perhaps with more planning and a wide-angle view, we can do our part.

Deeper Sow Culling

American pork producers have never expected handouts from the federal government — asking simply for reasonable and fair access in domestic and global markets and fair treatment on the regulatory front. Still, the past 18 months have been tough. Some in the pork industry have experienced an asset-erosion of 50%. The writing is on the wall — it's time to get serious about reducing the size of the U.S. breeding herd.

Last fall (September-October), it was estimated that U.S. producers had trimmed the national herd by about 160,000 sows (compared to the previous year), while Canadian producers lowered their count by about 128,000 sows — a total reduction of 3.7%.

In the Feb. 27 edition of North American Preview (posted at www.nationalhogfarmer.com), Mark Greenwood, vice president of agribusiness capital at AgStar, called on U.S. pork producers to follow the lead of the broiler and dairy industries by reducing production. Greenwood believes the U.S. industry needs to reduce the sow herd by 5-10%, which at the low end would mean reducing the nation's sow herd by 300,000 sows.

I agree. For the health of the U.S. pork industry, sow numbers need to come down further. A wait-and-see attitude will only delay a much-needed recovery. That is one segment of the economy where you all hold the trump cards.